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SILICON VILLAGE

Monday, April 24, 2017

Indian Smartphones Represent 62% of all Mobile Phones Sales in 2018

As the Indian cellular market goes
through consolidation and aggressive 4G roll out, demand forsmartphoneswill continue to grow. With smartphone penetration
maturing in many developed markets (see Table 1), continued growth in the
world’s third largest smartphone market makes India an attractive market to
device manufacturers. Smartphones in India are expected to account for 62
percent of all mobile phones sales in India in 2018.

Analyst
Take:“With the slowdown in sales in major markets, including
the U.S., China and mature Western Europe, India represents the largest
opportunity because it is the second-largest mobile phone market after China,”
saidAnshul Gupta, research director at Gartner.

In addition demonetization in India throughthe elimination of 500 and 1,000 rupee notescaused an increased push from the government for digital
currency, as well as people becoming more open to using digital payment
methods. The rise of digital currency is bringing a new use case for
smartphones, which, in turn, is set to trigger higher demands for smartphones.
This opens the opportunity for service providers to launch mobile wallet
solution or even vendors to launch their exclusive mobile payment solutions
like Android Pay or Apple Pay to build an ecosystem.

Leading
global vendors, Samsung and Apple, have made exclusive plans to grow their
shares in the market. Major Chinese manufacturers, such as Gionee, Huawei,
Oppo, BBK (Vivo), Xiaomi, Lenovo etc., have committed big investments to
exploit the growth opportunity.

Ever rising competition from Chinese
manufacturers has not only troubled top local brands such as Micromax, Intex,
Lava and Karbonn mobile but also resulted in a decrease in smartphone market
share for Samsung in India (see Table 2).

“With an exclusive focus on the market
from the device manufacturers, we expect more customized smartphones to come to
market and remain key to win in this highly competitive market,” said Gupta.

As opposed to earlier falling mobile
phone average selling price (ASP) trends led by the rush to low cost mobile
phone, we have noted a change in consumer spending. Our recently concluded
consumer survey showed, users are willing to spend more to get a smartphone
with better features than simply rushing for lowest price smartphones.

“The growing ASP trend will be
maintained in the coming years with the increasing middle class population and
rising per capita income leading to more disposable income to be spent on
electronic goods,” Gupta said.